More centres, fewer children: what falling occupancy means for your enrolments in 2026

For a long time, the hardest part of running a centre was finding enough room for all the families who wanted in. Waitlists did a lot of the enrolment work for you.

The latest national data says that era is ending. New figures from the Federal Education Department, in the Child Care Subsidy quarterly report for the March quarter 2026, show the number of children in centre-based day care falling while new centres keep opening. The gap between the two is showing up as empty rooms.

If your occupancy has softened over the past year, this is why. It's not a reflection on your centre. It's the market shifting under everyone at once.

1. What the numbers say

Across centre-based day care in Australia, in the year to March 2026:

The number of children fell 2.8%, from about 857,900 to 833,600
Licensed places rose 4.2%, so supply grew while demand shrank
Average occupancy dropped 4.9 percentage points to 74.3%, after a 2.6 point fall the year before

That last number is the one that lands on a budget. A centre sitting at 74% full is carrying the rent, the rostered educators and the fixed costs of a much busier service, on the fee income of a quieter one. The Education Department itself flagged that providers now need to watch occupancy and local demand closely, and the strain is already visible in the market, with one of the largest operators moving to suspend around 40 underused centres.

Annual growth in children attending has been sliding since early 2023. This is a trend with a two-year run-up, not a one-quarter blip.

2. Why it's happening

Three things are pushing in the same direction.

Fewer children. The main driver is the falling birth rate. There are simply fewer under-fives in the country than the sector planned for, and that flows through to enrolments a few years later.

Cost pressure on families. Participation has also dropped among lower-income families, who feel fee rises first. The average centre-based hourly fee climbed to around $14.50, up more than 4% on the year. Goodstart's Head of Advocacy, John Cherry, has argued that the case for improving affordability for these families is more urgent now than when the Productivity Commission recommended it. The Commission's plan to lift the subsidy to 100% for families earning under $80,000 is aimed squarely at bringing those children back.

More supply, not less. Even as demand softens, new services keep opening. Centre-based services grew 2.9% over the year, with 277 net new centres. Cherry's point, which is worth sitting with, is that state regulators have not slowed approvals to match demand, so new places often open in catchments that are already well covered. When that happens, it's usually the established community centre nearby that absorbs the occupancy hit.

3. What this means for your centre

For years, a family choosing care felt like the family being chosen. Places were scarce, so the centre held the position of strength.

That has flipped. With more places than children in many areas, families now have room to shop around, compare and take their time. You're being chosen, and so is every centre near you.

In that setting, a few empty places isn't a rounding error. If a long-day-care place is worth somewhere around $130 a day, even three or four unfilled places run to tens of thousands of dollars across a year, on costs you're paying regardless. Occupancy is the number that quietly decides whether a centre is comfortable or stretched, and it now depends on winning families who genuinely have a choice.

The centres that stay full in a softer market are not the ones with the newest fit-out or the lowest fee. They are the ones a local family can find, understand and trust before they ever pick up the phone.

4. One bright spot worth building on

Not every line in the data is heading down. Participation among four and five year olds keeps rising, as centres take on more of the funded kindergarten and preschool programs that state governments are investing in.

For a lot of services, that older cohort is becoming a more reliable, better-supported part of the roster. If your centre runs a strong kinder program, it's worth making that visible to families deciding where to start their younger children too. A parent who trusts you with a four year old is an easy conversation about the nursery room next.

5. Being the centre families choose

None of this calls for a marketing department. It calls for being clear about who you are, and making that easy to find.

When a parent in your suburb searches for care, a few things decide whether they enquire with you or scroll past:

Can they find you, and does it look alive? A current, warm online presence beats a polished one that hasn't been touched in a year.
Can they picture the place? Real footage of your rooms, your educators and an ordinary morning does more than any list of features. Families decide with their eyes and their gut, then justify it with the facts.
Is it easy to take the next step? A clear path from first click to booked tour, with a friendly reminder or two along the way, means fewer interested families quietly drift off.

This is the thinking behind how EEVA works with centres. We help you shape an honest story, capture it as a small set of videos you can use for years, then plug it into a simple Enrolment Content Engine so enquiries are followed up without you having to remember to do it. In a market where families are comparing you with the centre down the road, being the one that is easy to find and easy to trust is what keeps the rooms full.

6. A practical first step

If your occupancy has slipped and you're wondering what to do about it, start by looking at what a local family actually sees.

A short enrolment story audit walks through how your centre shows up online, where interested families are dropping off, and the one or two changes that would make the biggest difference over the next twelve months. It's a conversation, not a pitch, and you can take the ideas back to your team whether or not you ever work with us.

The market has shifted, and it's not shifting back soon. The centres that come through this well will be the ones that stop waiting for the waitlist to do the work, and start telling their story on purpose.